Answering the competition question

In my interviews with entrepreneurs, I always try to ask a simple question about the competitive landscape.

And invariably, I get the same answer — no matter if I am talking to the CEO of a new software, biotechnology or Internet firm.

The response usually goes something like this: “There is really no one else doing what we are doing.”

Really? I always tend to find some other company — while maybe not attacking the problem in the exact same way — that is pretty darn close (at least close enough that the entrepreneur should be aware of them). This common response also tends to frosts venture capitalists, who point out that lack of competition usually means lack of market. It is better just to name the three, four or five companies that are also playing in the space.

Earlier this week, I asked TripHub — a Seattle online group travel service –about possible competition. And while Chief Executive Josh Herst was smart enough to at least mention the likes of Expedia, Orbitz and Evite, he also ended his comments by saying that they were the first to do “a great job of making it much easier to plan, coordinate and share these trips.”

Maybe so. However, Herst failed to mention another player in the market: Groople. The company, which is based in Colorado and described as the “leading online group travel booking source,” today announced $6 million in venture funding.

My point? When asked who the competition is, please don’t follow the PR playbook and say: “There is really no one else doing what we are doing.” After all, someone else is always lurking. Good entrepreneurs — while not consumed by the competition — must at least be aware.

Answering the competition question

In my interviews with entrepreneurs, I always try to ask a simple question about the competitive landscape.

And invariably, I get the same answer — no matter if I am talking to the CEO of a new software, biotechnology or Internet firm.

The response usually goes something like this: “There is really no one else doing what we are doing.”

Really? I always tend to find some other company — while maybe not attacking the problem in the exact same way — that is pretty darn close (at least close enough that the entrepreneur should be aware of them). This common response also tends to frosts venture capitalists, who point out that lack of competition usually means lack of market. It is better just to name the three, four or five companies that are also playing in the space.

Earlier this week, I asked TripHub — a Seattle online group travel service –about possible competition. And while Chief Executive Josh Herst was smart enough to at least mention the likes of Expedia, Orbitz and Evite, he also ended his comments by saying that they were the first to do “a great job of making it much easier to plan, coordinate and share these trips.”

Maybe so. However, Herst failed to mention another player in the market: Groople. The company, which is based in Colorado and described as the “leading online group travel booking source,” today announced $6 million in venture funding.

My point? When asked who the competition is, please don’t follow the PR playbook and say: “There is really no one else doing what we are doing.” After all, someone else is always lurking. Good entrepreneurs — while not consumed by the competition — must at least be aware.